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The Tunisian president proposes imposing taxes on the rich to solve financial problems

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Tunisian President Kais Saied said today, Saturday, that raising taxes on the rich could be an alternative to difficult social reforms, as part of efforts to obtain a financial rescue package from the International Monetary Fund.

The Tunisian government reached a preliminary agreement in October with the International Monetary Fund for a $1.9 billion loan in return for subsidy cuts, public sector wage cuts and reforms within state-owned companies.

Credit rating agencies have warned that Tunisia will face a possible sovereign debt default unless it obtains this loan, which is also expected to lead to more bilateral financing flows.

The International Monetary Fund said that Tunisia needs to put its financial situation on a more sustainable path, after expressing concern earlier about the size of state employee wage and subsidy payments, the low tax base and support for non-profit state-owned companies.

Although the initial agreement was based on proposals made by the Tunisian government, Saied described the financial reforms stipulated in the agreement as “dictates.”

In a phone call with his French counterpart, Emmanuel Macron, details of which were published by the Tunisian presidential office, Saeed described the terms of the IMF agreement as “a match that burns along with highly explosive materials.”

He added, “Another scenario can be presented based on employing taxes on those who do not deserve support to finance the support fund so that it is support that achieves the desired justice.”